Recession impact hits U.P. harder now

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Capital News Service
LANSING — The economic recession has people across the Upper Peninsula looking for new jobs.
A loss of seasonal jobs and a downturn in the mining and manufacturing industries are mostly to blame, but the picture looks bleak elsewhere in Michigan, too.
Unemployment rose across the state from November to December 2001, raising fears that the economy will turn worse before it becomes better.
According to a study by the Michigan Department of Career Development, total employment dropped in each of the 12 major labor market areas in the state.
The overall unemployment rate for the state was 5 percent, the highest in six years.
That increase puts unemployment at the highest rate since 1995, when it was at 5.3 percent and also marks the first increase since 1991.
The unemployment rate rose 1.6 percent during December in the U.P. from 6.8 to 8.4 percent.
Decreases in employment in both mining and manufacturing could be partially to blame for the total employment drop from 146,600 to 143,300.
The indefinite layoffs at the Empire mine in Marquette accounted for almost 700 lost jobs.
The annual increase in retail employment for the holiday season helped to offset the decreases slightly, but not enough to have a large effect.
Retail sales dropped in the U.P. for the holiday season and also in the Alpena area, the only part of the state that experienced a greater fall in employment than the U.P.
From the middle to the end of 2001, employment in the U.P. fell from 154,600 to 143,300, a drop of 11,300 jobs or 7.3 percent.
The individual counties in the U.P. also possess some of the worst employment rates in the state, as 11 of the 15 counties that make up the U.P. are in the bottom half of the state.
“When we hit December, (unemployment) jumped almost 2 percent from the previous year,” said Kathy Salow, area analyst for the MDCD.
“Generally, when you are in a recession, the Upper Peninsula enters later than the rest of the state. We are later entering and we are later getting out.”
Mackinac County possesses the highest unemployment rate in the state at 19.9 percent.
As recently as last September, Mackinac had the lowest unemployment rate in the state at 1.6 percent.
That was due mainly to a decline in seasonal employment in the tourist industry said Barbara Bolin, director of the MDCD.
“…The three northern labor market areas recorded significant unemployment rate advances due to typical seasonal declines in tourism-related employment,” Bolin said.
The increase in unemployment also increased the welfare caseload handled by the Family Independence Program in December.
Welfare cases rose from 73,922 to 75,792 over the month of December, said Douglas E. Howard, director of the Family Independence Agency, the department in charge of the FIP.
Thanks to planning, the FIP was able to handle the rise in cases, Howard said.
“Because we expected changes in the national and state economy, an increase in December’s caseload was not a surprise,” Howard said.
“Our budget was adjusted to account for that, so we are still able to meet the needs of Michigan families with temporary financial difficulties.”
The FIP is prepared to handle any further increases in caseload as well, said Maureen Sorbet, assistant communications director of the MDCD.
“Our budget has been adjusted to handle any increase in cases over the next few months,” Sorbet said.
Even with the increase in cases over 2001, the FIP still handled 66.6 percent fewer cases than the most recent high of 226,863 set in March 1994.
The employment situation could get worse as a list of unknown origin circulated by an Atlanta business paper suggested that 16 Kmart stores could be closed in Michigan.
Nationwide, 291 stores in 38 states and Puerto Rico are on the list as candidates for closure.
The stores listed from Michigan include locations in Houghton, Marquette, Benton Harbor, Kentwood, Farmington and Lansing.
Kmart officials would not confirm that the stores on the list are ones that will be closed.
The Troy-based company has been evaluating the performance and leases of each of its stores during its Chapter 11 reorganization.
Kmart filed for Chapter 11 protection on Jan. 22.
Filing for Chapter 11 protection places a stay against creditor actions against a corporation.
The automatic stay allows a corporation time to negotiate with its creditors and to propose a reorganization plan.
Jack Butler, lead attorney for Kmart, told a creditors committee that a list of store closings would be submitted March 20, the Detroit Free Press reported.
Nevertheless, analysts believe that the closing of Kmart stores in the U.P. would not have a drastic effect across the peninsula.
“Employment provided by Kmart stores probably would not affect unemployment across the U.P. as a whole,” Salow said.
“However, Houghton and Marquette Counties could both be adversely affected.”
As retail stores close across the state, laid-off people are looking for other jobs.
Some, especially in the U.P., have turned to the armed forces in their search for jobs.
Maj. Gen. E. Gordon Stump, adjutant general of the Michigan National Guard, said that enlistment in the U.P. is at its highest point in years.
“Recruiting went down as the economy went up,” Stump said.
“As unemployment has been going up we have been doing better. We are 100 percent filled in the U.P. right now as unemployment has risen.”
A job in the armed forces provides a steady income and the opportunity for a solid education, attracting many people to their ranks.
“Seventeen universities and colleges work with us to give about a 45 percent tuition reduction,” Stump said.
“The National Guard provides a solid job and an education.”
© 2002, Capital News Service, Michigan State University School of Journalism

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